DEAR BENNY: We are a small association of approximately 80 units. Our problem is that our president enforces only select rules. He is constantly sending nasty letters about barking dogs, playing Frisbee with dogs off the leash (this is done in a remote retention area) with no people around, and kids squealing as they play at the pool.
However, he will not enforce the parking rule, which states "no overnight street parking or parking on the grass." He also took all the garbage cans from the pool so there is nowhere to dispose of trash, but he allows smoking, and people drop their ashes on the pool deck or wherever they are. What recourse do we have? –Rebecca
DEAR REBECCA: The short and simple answer: "Throw the rascal out." Every association has bylaws, and they all contain language giving guidance as to how to remove a board member.
Board members are elected by the owners, and only the owners (based on the percentage vote spelled out in the bylaws) can remove a director. However, officers are generally elected by the board, and in that situation the board can also remove an officer, but not from the board itself.
How many board members are there? Have you discussed your concerns with the other board members? Are they afraid of the president?
You cannot act on your own; you need to gather a large group of owners so that you will have sufficient votes to remove the president from the board. This is an election year; mount a good old-fashioned political campaign, just as if you were managing a senatorial or even a presidential election. Hold meetings in owners’ apartments, and prepare and circulate a letter to all owners explaining your concerns.
But keep in mind that you need to garner support, and not every owner will go along with you. You will have to arrange to have the board secretary set up a formal meeting time and place, when the recall vote will take place. And you will need to get proxies from those owners who do not plan to attend.
Community association living is democracy at its best and sometimes at its worst. If you cannot get sufficient support to remove the president from the board, you basically have three alternatives: (1) try to get elected to the board; (2) put up with the activities of the president; or (3) move out.
DEAR BENNY: I purchased a condo in November 1984. I was the first homeowner here. Two years ago a woman moved into our complex and did not like our rules. Since then, she has disseminated false information to homeowners to get her colleagues on the board along with her. She is now the president and the only liaison between our "new" lawyer. She has totally taken charge.
We have a pet rule, "No pets over 30 pounds." Letters were sent out under our old board in October 2011 stating that pets weighing more than 30 pounds had to be removed by this month and that the board of directors would consider no further appeals for a variance of this rule.
One of the board members is not in compliance and will not enforce the rule. I have documentation as well as pictures of this board member posing with her large dog. Where do I stand? Should I have to pay for another lawyer to make the board do what is right? Our association lawyer will not talk to me and says she works for the association, which in short, is our president. –Lou
DEAR LOU: Your situation is no different from Rebecca’s that I just answered. Unfortunately, there are a number of board members who are on an ego trip; they want to be called "mister or madam president." They know that many owners are like sheep, and will merely follow along with the crowd and not rock the boat or "throw that rascal out" of office.
As I asked Rebecca, have you talked with the other board members? Do they really support the president?
And are you alone in this venture or can you gather a large group of owners? There is strength in numbers, and the more owners you have on your side, the more the board will listen to your concerns.
You may have to retain another attorney to guide you through the process. If you have a number of owners supporting you, they should share in the cost of that lawyer.
DEAR BENNY: I have a listing on a condo for sale/lease. There are 49 units and 13 are currently tenant-occupied. My client requested permission from the board to lease his condo subject to selling or a lease with an option to purchase, but the association denied the request.
Who determines how any units can actually be used to rent? Is there any recourse for my client? –Ava
DEAR AVA: This is probably one of the most controversial issues involving community associations. As a direct result of the mortgage meltdown problems that were facing the country starting a few years ago, and because lenders have been hit with massive delinquencies (especially in community associations in Florida, Nevada and California), the lending community has tightened its money belt.
FHA, which currently underwrites a large amount of community association loans, has imposed strict guidelines as to what associations are eligible for mortgage loans within their community. Up until a couple of years ago, FHA approved "spot loans." That meant that the lender looked to the financial ability of the individuals who were buying or refinancing, and did not necessarily concern itself with the association. Now, spot loans no longer exist; if you want to get an FHA loan in your community, the association must be certified by FHA.
And this means that the association must have adequate reserves. It also means that no more than 50 percent of the owners can be investors.
As a result, community associations all over the United States are attempting to meet these tough standards. Boards of directors are proposing amendments to their legal documents to put a cap on the number of rentals that will be permitted within the complex.
To answer your specific question, you have to review the condo’s legal documents. Case law is clear throughout the country that in the absence of language in the legal documents restricting the number of investor-owners, a board cannot merely by adopting a rule impose such restrictions. They must be included in the condo association’s declaration, which means that a formal amendment may be needed. This will always require a supermajority of owners to vote, either 66.67 percent or even 75 percent of the membership.
If the association does not have any such restrictions, then your client (should he wish to pursue the matter) should retain his own attorney. But if there is already language in the legal documents restricting leasing, then you have to comply with that language.
DEAR BENNY: Back in 2011 my husband and I put a contract on a condo. We received the customary homeowners association (HOA) documents for our review, giving us the ability to rescind our contract if we did not agree with or like the documents. I read them and we went ahead and purchased the condo.
In 2012 it has come to our attention that we are part of a greater master association that can make decisions affecting our condo association, as well as obligating us to maintenance expenses we had no idea we were going to be part of. I feel this was not fully disclosed, and had we known that, we would not have purchased. We have lived here a year. Can I get my purchase price back and do the other homeowners have a class-action suit, as this is true for them? –Deborah
DEAR DEBORAH: I seriously doubt that you can get your money back. Are you sure that the disclosure documents you received prior to closing did not disclose the existence of a master association?
If they did, then you are out of luck. The defense will clearly state that "you had the opportunity to cancel the contract based on your review of the condo documents, but opted not to cancel. Accordingly, you have no case."
On the other hand, if you are absolutely sure that the documents you reviewed did not disclose this information, then there may be help. Recently, a Maryland high court held that if the resale package provided to potential homebuyers is misleading, or contains misrepresentations (and I would consider an omission to fall within those categories), then owners such as yourself may have a case against the association (or the developer) based on a violation of the applicable state consumer protection statute.
This may be state-specific to Maryland, but it’s worth looking into. The case (MRA Property Management Inc. v. Armstrong) was decided in April of this year by the Maryland Court of Appeals.